申論題

20. Under Modigliani-Miller world, one firm has its original balance sheet as the following:
  
 What's the price per share, and firm value after the following two cases: (1) the firm paid cash dividend of $500,000 and (2) the stock repurchases of SS00,000? Compare the firm value in both cases. What does your resuit suggest the choice between cash dividend and stock repurchase in Modigliani-Miller world?(9 points total) Debt $550,000 Equity 1,450,000 2,000,000 Value of Firm 2,000,000 2,000,000